The Government appears to have taken note of concerns over retrospective taxation and amended the Finance Bill 2016 in an attempt to remove the possibility in certain circumstances.
Entrepreneurs’ relief was introduced by the Treasury as an incentive to entrepreneurship and business growth. Capital gains tax arising from relevant disposals is applied at 10% rather than the full rate of capital gains tax.
There had been concern that some who had legitimately claimed the 10% rate under the associated disposals rules may have found in retrospect that they did not qualify and would have to make up the difference to the then 18%or 28% rates of tax.
The amendment to the Finance Bill 2016 will mean that the new rules will only apply to the associated disposals of assets acquired since 13th June 2016, thereby preventing any retrospective liabilities from arising.